Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Are Australians Turning Their Back On Sugar Consumption?

The number of consumers who are cutting down on sugar or seeking to avoid it completely continued to increase in 2017. This is due to relatively high levels of education amongst Australians about the effects of excessive sugar consumption. The impact of this trend is well documented within the packaged food industry and has resulted in consumers shifting from sweet snacking to savoury snacking.

Consumers now turn to products such as pulse-based chips, snack bars or nuts, as shoppers value the high protein content of these products. The yoghurt industry is another prime example of this ‘sugar is the enemy’ mentality seen amongst Australian consumers. Australians are now snacking on plain, Greek-style yoghurt as opposed to fruited or flavoured yoghurts, as they often contain high levels of added sugar. Within the beverage industry, the effect of this trend continues to have a negative impact on carbonates. Consumer aversion to sugar is expected to remain strong over the next five years and continue to impact both packaged foods and beverages.

Data shows that the sugar and sweeteners category is likely to register weak sale growth during the forecast period, which can be attributed primarily to the serious concerns that many Australians have about the negative health implications of excessive sugar consumption.

The role of sugar in increasing the risk of obesity and diabetes is likely to remain a major concern. This has led to the emergence of high-profile public information campaigns such as ‘I Quit Sugar’, a book and blog by Australian journalist and television presenter Sarah Wilson, and ‘That Sugar Film’, a documentary by Australian actor Damon Gameau. There is now ample information that sugar and not fat, is behind the rising incidence of obesity and diabetes.

Although consumers are being encouraged to eliminate processed food and sugary beverages as the ideal method to reduce their sugar intake, it is expected that consumers will also seek to reduce the amount of sugar they add to their hot drinks, breakfast cereals and other types of food and drink, resulting in sugar and sweeteners registering merely moderate growth over the next few years.

Health concerns over sugar are expected to result in diversification of products

With the media putting a spotlight on the high levels of sugar consumption among the Australian population and the increasing awareness of the negative effect that excessive sugar consumption has on the health of consumers, many people are now committed to avoiding sugar wherever possible. However, many consumers are starting to realise that not all sugars have the same effect on the body and this is likely to result in certain types of sugar becoming more popular than others.

Sucrose derived from sugar cane remains Australia’s most popular type of sugar. This is despite a decline in sales, which has similarly been noted in other variants of sugar such as regular white, brown and caster sugar. Demand seems to be shifting towards premium and exotic varieties of sugar, which has supported the category and ensured that growth rates remain positive, particularly in value terms. However, plain white sugar made from sugar cane-derived sucrose is likely to remain the most popular type of sugar in the country for the foreseeable future due to the longstanding tradition of its use and its much lower price than other types of sugar.

Education about different varieties of sugar likely to be key to supporting demand

With demand for sugar set to continue diversifying, the category’s leading manufacturers are likely to continue encouraging consumers to continue purchasing sugar by educating consumers about different types of sugar from around the world that are becoming more widely available in Australian retail outlets.

The crucial aspect of these efforts is likely to involve educating consumers about how different types of sugar are used in the preparation of various dishes and for different purposes. Recent product launches in this area have included CSR’s Sugars of the World range, which includes varieties such as Indonesian coconut blossom sugar, Sri Lankan rapadura sugar and Mexican agave sugar. It is likely that rival players such as Billington’s will continue to attract interest with their ranges of exotic sugars and further innovation can be expected in this area over the forecast period.

However, Australia has a strong and longstanding sugarcane cultivation industry; sugarcane is the leading agricultural crop in Queensland, with 380,000 hectares under cultivation annually. Thus, it is unlikely that imported premium sugar will stand much chance of becoming mainstream before the end of the forecast period.

A focus on healthy living shows no signs of letting up

The trend of Australians prioritising their health and living a healthy lifestyle is set to continue over the next few years. This is reflected in lifestyle choices, for example cutting down on alcohol consumption, incorporating physical activity into their lives and in their healthier food and beverage decisions.

These trends are reflected in the strong growth of products that have a healthy positioning, such as meat alternatives, stemming from consumer concerns about both health and the environment, and other milk alternatives, such as soy-, pulse- or nut-based milk products. In addition to a focus on consuming healthier food and beverages, convenience will also remain a significant trend as Australians continue to lead busy lives. This will result in demand for convenient products such as chilled ready meals and prepared salads remaining strong.